Slow job growth leaves long-term unemployed struggling

Originally published March 19, 2014 at 8:07 pm
Updated March 20, 2014 at 6:39 pm

Rick Grossman, in his Kent apartment, is one of the state’s many long-term unemployed workers. A former business owner, he said he applies to as many as five jobs a day and is not very picky when it comes to pay.

Rick Grossman now spends his days trying to persuade employers to give him a chance. But for years, he was on the other side of the table as a small-business owner in New Jersey.

Grossman, 61, sold his business and moved to the Seattle area two years ago, lured by a more temperate climate and good quality of life. Given Seattle’s reputation for a strong economy, he also figured it would be easy to find a job.

Today, Grossman is among Washington state’s estimated 72,000 long-term unemployed workers — those without a job for at least six months.

“I’ve been applying for jobs the whole time, and I’m unable to find work,” he said. “It’s certainly disappointing.”

New data released Wednesday suggest the long-term unemployed will continue to face a tough job market.

Joblessness statewide held steady in February at 6.4 percent. But employers added only 2,500 new jobs last month, down from 5,800 in January, according to the state Employment Security Department.

Given the sluggish pace of hiring, job prospects are especially dim for workers grappling with long stretches of unemployment. Even those like Grossman, who has three decades of job experience, can be seen by employers as lacking motivation or a work ethic.

Without more opportunities for the long-term unemployed, the job market remains subpar five years after the start of an economic recovery.

Benefit proposal

Even Congress has taken note. The U.S. Senate is expected to act next week on a proposal to renew extendedbenefits for the long-term unemployed that expired in late December.

A White House official said in an annual economic report March 10 that the nation’s stubbornly high jobless rate is “entirely due to long-term unemployment.” Meanwhile, Gov. Jay Inslee directed Employment Security to spend $4 million in federal money on new efforts to help long-term unemployed workers find jobs.

From 2007 to 2011, the fraction of Washington’s unemployed workers who were jobless six months or longer increased from 13 to 39 percent, well above the previous record of 24 percent, set in 1983.

Long-term unemployment fell last year to about 30 percent of the statewide total but still is “disturbingly high,” said David Cooper, an analyst at the Economic Policy Institute in Washington, D.C.

“There’s a tremendous number of people who have been struggling to find work and probably are struggling to get by every day,” Cooper said. “Unless we see major change in the labor market soon, they’re probably going to be struggling for a while.”

Cooper said the official data underestimate the actual number of long-term unemployed workers. That’s because those who have stopped looking for a job no longer are counted as unemployed.

“Unfortunately, a significant portion of the long-term unemployed are giving up and dropping out of the labor force,” he said. “There just hasn’t been the level of consumer demand needed out there to compel businesses to go out and hire more people.”

Washington has gained back all the jobs lost in the Great Recession, at least in absolute numbers. But it’s nowhere near a full recovery when you consider growth in the working-age population, Cooper said.

He estimates that over the next three years, Washington would need to add about 8,500 new jobs a month — nearly twice its current pace — to return to pre-recession joblessness in the mid-4 percent range.

Until then, employers can afford to be choosy, and job applicants who’ve been out of work for a while will continue to be overlooked, he said.

“Employers see a gap of three to six months in a résumé and think, ‘There must be something wrong with this person,’” he said. “It’s like kicking these people when they’re down.”

Expansion mode

Despite weak job growth, Washington’s economy remains in expansion mode and is pulling people back into the labor market, state officials said Wednesday.

A bright spot in February was the addition of about 10,000 people to the labor force, a possible sign that discouraged workers restarted their job searches. The labor force includes all those working or looking for work.

“The economy is holding its own. People are moving into the job market and actually finding jobs,” said Paul Turek, a labor economist for the Employment Security Department.

Joblessness in the Seattle metro area, which includes Bellevue and Everett, declined to 5.1 percent in February from 5.2 percent a month earlier. Local employers added 2,500 new jobs, the same as all of Washington, meaning that without Seattle, Washington would have had no net increase.

Grossman said he’s looking for work in retail management, corporate purchasing or staff training. He owned a pair of toy stores in New Jersey for a decade and previously worked at AT&T. He said he applies to as many as five jobs a day and is not very picky when it comes to pay.

To get by, Grossman said he still has some savings and lives a frugal lifestyle in his Kent apartment.

“Given my experience with self-employment, I think people are a little concerned I won’t take orders well. And now that I’ve been out of work for a while, there’s a stigma,” he said. “People begin to question, ‘Why hasn’t anyone else snapped you up?’ ”

For now, at least, the plight of the long-term unemployed is attracting some attention in the Other Washington.

About 28,000 jobless workers statewide lost unemployment benefits Dec. 28 after Congress failed to renew a federal emergency program for the long-term unemployed. An additional 11,000 people ran out of their regular six months of benefits in January and February, according to Employment Security.

Senate Democrats have announced a bipartisan agreement to provide for a five-month extension retroactive to Dec. 28, but the bill faces an uncertain future in the Republican-led House.

In any case, Grossman is not eligible for unemployment benefits because he was self-employed in his last job.

He said all he needs is to make a connection with “that one person” willing to hire him and remains optimistic.

“I’d really never been out of work before. I worked even when I was in college,” said Grossman, who has a bachelor’s in secondary science education from Temple University.